Duke Energy · 10-Q · Item 2 MD&A

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Duke Energy and Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. However, none of the registrants make any representation as to information related solely to Duke Energy or the Subsidiary Registrants of Duke Energy other than itself.

DUKE ENERGY

Duke Energy, an energy company headquartered in Charlotte, North Carolina, operates in the U.S. primarily through its subsidiaries, Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. Duke Energy’s consolidated financial information includes the results of the Subsidiary Registrants, which along with Duke Energy, are collectively referred to as the Duke Energy Registrants.

Management’s Discussion and Analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes for the six months ended June 30, 2026, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2025.

Executive Overview

During the six months ended June 30, 2026, we continued to execute our strategy of investing in infrastructure necessary to support customer growth while maintaining reliability and financial discipline. T1We completed two strategic transactions that generated approximately $5.3 billion of proceeds to support future infrastructure investments, advanced key regulatory initiatives, including the planned combination of our Carolinas' electric utilities, and maintained reliability as we met continued growth across our service territories. These developments support our long-term capital investment plan and position us to meet the increasing energy needs of our customers while creating long-term value for shareholders.

Executing on Strategic Transactions. Our service territories continue to experience significant growth driven by economic development activity, population growth and increasing customer demand, which are expected to support substantial capital investment opportunities in the coming years. We completed two previously announced strategic transactions that enhance our financial flexibility and support the funding of our long-term capital plan.

On March 3, 2026, we completed the first closing of a minority investment in Florida Progress, the holding company of Duke Energy Florida, by an affiliate of Brookfield Super-Core Infrastructure Partners. The initial investment resulted in the transfer of a 9.19% ownership interest for approximately $2.8 billion in cash proceeds, with additional staged investments anticipated through 2028. On March 31, 2026, following approval by the TPUC, we closed on the sale of Piedmont's Tennessee business to Spire, Inc. and received approximately $2.5 billion in cash proceeds.

The successful execution of these transactions supports our ability to fund the investments required to meet anticipated customer growth while maintaining financial flexibility through disciplined capital allocation. See Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for further information.

Constructive Regulatory Outcomes. During the six months ended June 30, 2026, we continued to advance key regulatory initiatives and the investments necessary to support growth, maintain reliable service and position our business for long-term success. These efforts remain focused on delivering safe and reliable electric and natural gas service, supporting customer affordability and achieving timely recovery of prudent costs.

•Revised base rates became effective during the first quarter of 2026 for Duke Energy Carolinas' and Duke Energy Progress' South Carolina service territories and Duke Energy Kentucky's natural gas business. During 2026, Duke Energy Ohio's electric and natural gas businesses and Piedmont's South Carolina natural gas business filed new base rate applications. In July, we reached settlements in Duke Energy Carolinas' 2025 North Carolina Rate Case and proceedings related to Winter Storm Fern. Our regulatory efforts remain focused on securing the recovery of investments necessary to maintain and strengthen our electric and natural gas systems while continuing to provide reliable service to customers.

•We received CECPCN approval from the PSCSC for a new combined-cycle generating unit in Anderson County, South Carolina, as well as out-of-state certificates for new combustion turbine facilities at Marshall Steam Station and new combined-cycle units in Person County, North Carolina. These projects are expected to play an important role in supporting growing customer demand and maintaining system reliability as we modernize our generation fleet. In May 2026, the PSCSC also issued an order accepting our latest Carolinas systemwide resource plan.

•T2Our nuclear fleet continues to provide a significant source of reliable, carbon-free and cost-competitive generation. In February 2026, we announced that our nuclear fleet achieved a record systemwide capacity factor in 2025. In April 2026, the NRC issued a subsequent license renewal for Robinson, extending operations through 2050. Also during April, we executed a multi-year agreement to sell up to $3.1 billion of net tax credits through 2029, including nuclear PTCs, in continued support of providing low-cost electricity to our customers.

•T3The FERC issued an order authorizing the proposed combination of our two electric utilities operating in the Carolinas, finding the transaction consistent with the public interest. The companies also reached comprehensive settlements with intervenors in North Carolina and South Carolina and received approvals from both the NCUC and the PSCSC. The targeted effective date of the combination remains January 1, 2027.

Economic Development. Customer growth across our service territories continues to be driven by population growth, economic development activity and increasing electrification. T4Demand associated with data center development remains a significant contributor to projected load growth.

MD&A

DUKE ENERGY

We continue to expand our portfolio of data center electric service agreements, increasing contracted capacity while maintaining a disciplined approach to infrastructure investment. These arrangements include financial protections designed to support system reliability, facilitate continued investment and align the costs of serving new large-load customers with the customers driving those investments. As a result, these agreements help mitigate the potential for cost impacts to other customers while supporting continued growth opportunities across our jurisdictions.

These trends continue to support Duke Energy’s long‑term regulated capital plan while supporting reliable service and customer affordability.

Operational Excellence. The safe and reliable operation of our electric generation fleet, transmission and distribution systems and natural gas infrastructure remains fundamental to serving our customers and supporting our financial performance. Operational excellence is particularly important during significant weather events when system reliability and effective service restoration are critical.

In late January 2026, Winter Storm Fern impacted all of our service territories. Sustained subfreezing temperatures drove customer energy usage to record winter peak demand levels across the Carolinas. T5We implemented storm preparation and response measures, including pre‑positioning crews and equipment, coordinating mutual‑assistance resources and leveraging established restoration processes. These efforts supported continued system reliability and timely restoration activities where service interruptions occurred.

See Notes 4 and 16 to the Condensed Consolidated Financial Statements, "Regulatory Matters" and "Income Taxes," respectively, along with "Other Matters," for additional information.

Duke Energy Objectives and Beyond. For the remainder of 2026, we remain focused on executing our strategic priorities, including advancing key regulatory initiatives, supporting customer growth and investing in the infrastructure necessary to maintain safe and reliable service. The combination of constructive regulatory outcomes, continued economic development growth, disciplined capital allocation and strong operational execution positions us to support our customers and communities while creating long‑term shareholder value.

Matters Impacting Future Results

The matters discussed herein could materially impact the future operating results, financial condition and cash flows of the Duke Energy Registrants.

Regulatory Matters

Coal Ash Costs

In April 2024, the EPA issued the 2024 CCR Rule, which significantly expands the scope of the 2015 CCR Rule by establishing regulatory requirements for inactive surface impoundments at retired generating facilities and previously unregulated coal ash sources at regulated facilities. Duke Energy is participating in legal challenges to the 2024 CCR Rule. In April 2026, the EPA proposed to rescind or modify certain aspects of the 2015 CCR Rule, as amended by the 2024 CCR Rule. Duke Energy is evaluating the proposed rule and its potential impact on the Company, which could be material.

Cost recovery for future expenditures is anticipated and will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of reasonable and prudently incurred costs associated with Duke Energy’s regulated operations. For more information, see "Other Matters" and Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters."

EPA Regulations of GHG Emissions

In April 2024, the EPA issued final rules under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants. T6Compliance with EPA Rule 111, if implemented as issued, would have a material impact on the timing, nature and magnitude of future generation investments in our service territories. Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of reasonable and prudently incurred costs associated with Duke Energy’s regulated operations. Duke Energy is participating in legal challenges to the final rules. In June 2025, the EPA published a proposed rule to repeal EPA Rule 111 as well as an alternative proposal to repeal a narrower set of requirements. Duke Energy is evaluating these proposals and their potential impacts on the Company. For more information, see "Other Matters."

Supply Chain

T7The Company continues to monitor the ongoing stability of markets for key materials and supplies, including potential impacts on the prices or availability of goods resulting from global conflicts, geopolitical developments, restrictions on trade involving certain rare earth materials and technologies used in electric utility infrastructure or evolving trade and tariff policies. Public policy developments, including new or revised tariffs or other actions from federal executive orders, federal legislation or other rulemakings, could disrupt or impact Duke Energy's supply chain, future financial results, capital plan or execution on the Company's energy modernization strategy.

Goodwill

The Duke Energy Registrants performed their annual goodwill impairment tests as of August 31, 2025. As of that date, the estimated fair values of all reporting units materially exceeded the carrying values except for the GU&I reporting unit of Duke Energy Ohio. No goodwill impairment charges were recorded in the accompanying Condensed Consolidated Statements of Operations. However, adverse changes in economic conditions, projected future cash flows or peer company equity valuations could reduce the estimated fair value of the GU&I reporting unit below its carrying amount and result in goodwill impairment charges in future periods.

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DUKE ENERGY

Results of Operations

Non-GAAP Measures

Management’s Discussion and Analysis includes financial information prepared in accordance with GAAP in the U.S., as well as certain non-GAAP financial measures, adjusted earnings and adjusted EPS, discussed below. Non-GAAP financial measures are numerical measures of financial performance, financial position or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, financial measures presented in accordance with GAAP. Non-GAAP measures presented may not be comparable to similarly titled measures used by other companies because other companies may not calculate the measures in the same manner.

Management evaluates financial performance in part based on non-GAAP financial measures, including adjusted earnings and adjusted EPS. Adjusted earnings and adjusted EPS represent income from continuing operations available to Duke Energy Corporation common stockholders in dollar and basic per share amounts, adjusted for the dollar and per share impact of special items. Special items represent certain charges and credits, which management believes are not indicative of Duke Energy's ongoing performance. The most directly comparable GAAP measures for adjusted earnings and adjusted EPS are GAAP Reported Earnings (Loss) and GAAP Reported Basic Earnings (Loss) Per Share, respectively.

Special items included in the periods presented below include the following, which management believes do not reflect ongoing costs:

•Legal and Regulatory Settlements represent the impact of charges related to legal settlements as well as regulatory settlements related to the Duke Energy Carolinas' North Carolina rate case and establishment of a regulatory liability associated with an energy efficiency program at Duke Energy Carolinas and Duke Energy Progress.

•Asset Sales represent the impact of gains on sale of assets related to Piedmont's Tennessee business and certain renewable natural gas investments.

Discontinued Operations represents the resolution of an outstanding liability related to the Commercial Renewables Disposal Groups.

GAAP reported EPS was $1.38 for the three months ended June 30, 2026, compared to $1.25 for the three months ended June 30, 2025. In addition to the drivers below, GAAP reported EPS includes the impact of charges related to North Carolina rate case settlements for the three months ended June 30, 2026.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $1.43 for the three months ended June 30, 2026, compared to $1.25 for the three months ended June 30, 2025. The increase in adjusted EPS was primarily due to the recovery of infrastructure investments to reliably serve customers in our growing jurisdictions, partially offset by higher depreciation on a growing asset base and interest expense.

The following table reconciles non-GAAP measures, including adjusted EPS, to their most directly comparable GAAP measures.

Three Months Ended June 30,

(in millions, except per share amounts)

Earnings

EPS

Earnings

EPS

GAAP Reported Earnings/GAAP Reported EPS

$

$

$

$

Adjustments:

Regulatory Settlements(a)

—

—

Discontinued Operations(b)

—

—

1

—

Adjusted Earnings/Adjusted EPS

$

$

$

$

Note: Total EPS may not foot due to rounding.

(a)Net of $12 million tax benefit. $51 million recorded within Impairments of assets and other charges.

(b)Recorded in Income (Loss) from Discontinued Operations, net of tax.

GAAP Reported EPS was $3.35 for the six months ended June 30, 2026, compared to $3.00 for the six months ended June 30, 2025. In addition to the drivers below, GAAP reported EPS increased primarily due to the gain on sale of Piedmont's Tennessee business, offset by charges related to legal and regulatory settlements.

As discussed above, management also evaluates financial performance based on adjusted EPS. T8Duke Energy’s adjusted EPS was $3.36 for the six months ended June 30, 2026, compared to $3.00 for the six months ended June 30, 2025. The increase in adjusted EPS was primarily due to the recovery of infrastructure investments to reliably serve customers in our growing jurisdictions, partially offset by higher depreciation on a growing asset base, interest expense and operation and maintenance expense, including storm costs.

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DUKE ENERGY

The following table reconciles non-GAAP measures, including adjusted EPS, to their most directly comparable GAAP measures.

Six Months Ended June 30,

(in millions, except per share amounts)

Earnings

EPS

Earnings

EPS

GAAP Reported Earnings/GAAP Reported EPS

$

$

$

$

Adjustments:

Legal and Regulatory Settlements(a)

—

—

Asset Sales(b)

—

—

Discontinued Operations(c)

1

—

Adjusted Earnings/Adjusted EPS

$

$

$

$

Note: Total EPS may not foot due to rounding.

(a)Net of $59 million tax benefit. $172 million recorded within Operations, maintenance and other, $51 million recorded within Impairments of assets and other charges and $25 million recorded within Operating Revenues.

(b) Net of $196 million tax expense, which includes the impact of nondeductible goodwill related to the sale of Piedmont's Tennessee business. $374 million recorded within Gains on Sales of Other Assets and Other, net and $7 million recorded within Property and other taxes.

(c) Recorded in Income (Loss) from Discontinued Operations, net of tax.

SEGMENT RESULTS

The remaining information presented in this discussion of results of operations is on a GAAP basis. Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to NCI and preferred stock dividends. Segment income includes intercompany revenues and expenses that are eliminated on the Condensed Consolidated Financial Statements.

Duke Energy's segment structure includes the following segments: EU&I and GU&I. The remainder of Duke Energy’s operations is presented as Other. See Note 3 to the Condensed Consolidated Financial Statements, “Business Segments,” for additional information on Duke Energy’s segment structure.

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SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

Electric Utilities and Infrastructure

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

Variance

Variance

Operating Revenues

$

$

$

$

Operating Expenses

Fuel used in electric generation and purchased power

Operation, maintenance and other

Depreciation and amortization

Property and other taxes

Impairment of assets and other charges

(1)

(1)

Total operating expenses

Gains (Losses) on Sales of Other Assets and Other, net

2

8

(6)

7

9

(2)

Operating Income

Other Income and Expenses, net

(7)

(5)

Interest Expense

Income Before Income Taxes

Income Tax Expense

Less: Net Income Attributable to NCI

Segment Income

$

$

$

$

$

$

Duke Energy Carolinas GWh sales

Duke Energy Progress GWh sales

Duke Energy Florida GWh sales

Duke Energy Ohio GWh sales

Duke Energy Indiana GWh sales

Total Electric Utilities and Infrastructure GWh sales

Net proportional MW capacity in operation

EU&I’s results were primarily driven by higher revenues from rate cases across multiple jurisdictions and higher weather-normal retail sales volumes and lower operation and maintenance expenses, partially offset by higher depreciation expense, impairments and interest expense. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

•a $145 million increase in fuel revenues primarily due to net higher fuel rates and volumes in the current year;

•a $117 million increase due to higher pricing from rate cases across jurisdictions;

•an $84 million increase in weather-normal retail sales volumes;

•a $74 million increase in rider revenue primarily due to higher rates for the SPP at Duke Energy Florida and the Distribution Capital Investment Rider at Duke Energy Ohio; and

•a $52 million increase in wholesale revenues, net of fuel, due to higher capacity volumes and rates at Duke Energy Progress.

Partially offset by:

•a $278 million decrease in storm recovery revenues at Duke Energy Florida; and

•a $20 million decrease in retail sales due to less favorable weather in the current year.

Operating Expenses. The variance was driven primarily by:

•a $255 million decrease in operation, maintenance and other primarily due to lower storm amortization at Duke Energy Florida; and

•a $28 million decrease in property and other taxes due to franchise tax refunds, partially offset by a higher base on which property taxes are levied across jurisdictions.

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SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

Partially offset by:

•a $112 million increase in depreciation and amortization primarily due to higher depreciable base across all jurisdictions and the impact of new rates implemented by jurisdictional rate cases and the prior year retirement of renewable energy credits at Duke Energy Progress;

•a $50 million increase in impairment of assets and other charges primarily due to regulatory settlements related to the 2025 North Carolina rate case; and

•a $35 million increase in fuel used in electric generation and purchased power primarily due to higher purchased power costs, partially offset by lower fuel cost recovery and the prior year retirement of renewable energy credits at Duke Energy Progress.

Interest Expense. The increase was primarily due to higher outstanding debt balances across jurisdictions, lower returns on deferred storm cost balances and higher accrued financing costs associated with deferred nuclear PTC liabilities at Duke Energy Carolinas.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income. The ETRs for the three months ended June 30, 2026, and 2025, were 14.7% and 14.1%, respectively.

Net Income Attributable to NCI. The increase was due to the first closing of a minority interest investment in Florida Progress by Brookfield Super-Core Infrastructure Partners.

EU&I’s results were primarily driven by higher revenues from rate cases across multiple jurisdictions and higher weather-normal retail sales volumes, partially offset by higher depreciation and operation and maintenance expenses. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

•a $431 million increase in fuel revenues primarily due to net higher fuel rates and volumes in the current year;

•a $319 million increase due to higher pricing from rate cases across jurisdictions;

•a $117 million increase in weather-normal retail sales volumes;

•an $87 million increase in wholesale revenues, net of fuel, due to higher capacity volumes and rates at Duke Energy Progress;

•a $79 million increase in rider revenues primarily due to higher rates for the SPP at Duke Energy Florida and Distribution Capital Investment Rider at Duke Energy Ohio; and

•a $50 million increase in other revenues primarily due to higher transmission revenues across jurisdictions.

Partially offset by:

•a $261 million decrease in storm recovery revenues at Duke Energy Florida.

Operating Expenses. The variance was driven primarily by:

•a $356 million increase in fuel used in electric generation and purchased power primarily due to higher natural gas prices and higher purchased power costs, partially offset by lower fuel cost recovery and the prior year retirement of renewable energy credits at Duke Energy Carolinas and Duke Energy Progress;

•a $276 million increase in depreciation and amortization primarily due to higher depreciable base across jurisdictions, higher depreciation rates driven by rate cases and the prior year retirement of renewable energy credits at Duke Energy Carolinas and Duke Energy Progress;

•a $50 million increase in impairment of assets and other charges primarily due to regulatory settlements related to the 2025 North Carolina rate case; and

•a $30 million increase in operation, maintenance and other primarily due to increased costs related to a legal settlement, higher storm costs in the current year associated with Winter Storm Fern, higher nuclear outage costs and higher costs related to customer products and services programs at Duke Energy Progress and Duke Energy Carolinas, partially offset by lower storm amortization at Duke Energy Florida.

Interest Expense. The increase was primarily due to higher outstanding debt balances across jurisdictions, lower returns on deferred storm cost balances and higher accrued financing costs associated with deferred nuclear PTC liabilities at Duke Energy Carolinas.

Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of nuclear PTCs, partially offset by a decrease in the amortization of EDIT. The ETRs for the six months ended June 30, 2026, and 2025, were 12.0% and 13.4%, respectively. The decrease in the ETR was primarily due to an increase in the amortization of nuclear PTCs, partially offset by a decrease in the amortization of EDIT.

Net Income Attributable to NCI. The increase was due to the first closing of a minority interest investment in Florida Progress by Brookfield Super-Core Infrastructure Partners.

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SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Gas Utilities and Infrastructure

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

Variance

Variance

Operating Revenues

$

$

$

$

$

$

Operating Expenses

Cost of natural gas

Operation, maintenance and other

(2)

8

Depreciation and amortization

(2)

6

Property and other taxes

(3)

Total operating expenses

Gains (Losses) on Sales of Other Assets and Other, net

—

—

—

—

Operating Income

1

Other Income and Expenses, net

6

6

Interest Expense

(4)

(2)

Income (Loss) Before Income Taxes

2

Income Tax Expense (Benefit)

3

(4)

7

Segment Income (Loss)

$

$

6

$

4

$

$

$

Piedmont LDC throughput (dekatherms)

Duke Energy Midwest LDC throughput (Mcf)

GU&I’s results were primarily driven by lower franchise taxes, offset by lower operating results due to the sale of Piedmont's Tennessee business. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

•a $28 million decrease in cost of natural gas revenues primarily due to lower commodity prices; and

•a $24 million decrease due to lower revenues as a result of the sale of Piedmont's Tennessee business.

Partially offset by:

•an $8 million increase due to higher capital riders.

Operating Expenses. The variance was driven primarily by:

•a $28 million decrease in cost of natural gas revenues primarily due to lower commodity prices; and

•a $13 million decrease in property and other taxes primarily due to lower franchise taxes.

Income Tax Expense (Benefit). The increase in tax expense was primarily due to an increase in pretax income and lower state tax expense in the prior year. The ETRs for the three months ended June 30, 2026, and 2025, were 23.1% and (200)%, respectively. The increase in the ETR was primarily due to lower state tax expense in the prior year.

GU&I’s results were primarily driven by the gain on sale of Piedmont's Tennessee business and growth in capital riders. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

•a $123 million increase in cost of natural gas revenues primarily due to higher commodity prices;

•a $24 million increase due to customer growth in North Carolina and South Carolina and the North Carolina Integrity Management Rider (IMR);

•a $14 million increase in Midwest rider revenue; and

•an $11 million increase primarily due to higher pricing from the 2025 Duke Energy Kentucky natural gas rate case.

Partially offset by:

•a $24 million decrease due to lower revenues as a result of the sale of Piedmont's Tennessee business.

MD&A

SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Operating Expenses. The variance was driven primarily by:

•a $123 million increase in the cost of natural gas primarily due to higher commodity prices.

Gains (Losses) on Sales of Other Assets and Other, net. The increase was primarily due to the sale of Piedmont's Tennessee business, net of allocated goodwill.

Income Tax Expense (Benefit). The increase in tax expense was primarily due to an increase in pretax income and non-deductible goodwill associated with the sale of Piedmont's Tennessee business. The ETRs for the six months ended June 30, 2026, and 2025, were 35.4% and 19.7%, respectively. The increase in the ETR was primarily due to non-deductible goodwill associated with the sale of Piedmont's Tennessee business.

Other

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

Variance

Variance

Operating Revenues

$

$

$

—

$

$

$

—

Operating Expenses

(5)

Gains (Losses) on Sales of Other Assets and Other, net

7

6

1

1

Operating Gain (Loss)

6

(7)

Other Income and Expenses, net

9

Interest Expense

(5)

Loss Before Income Taxes

Income Tax Benefit

5

4

Less: Preferred Dividends

2

2

Net Loss

$

$

$

$

$

$

Other's results were primarily driven by higher investment returns from favorable market performance.

Other Income and Expenses, net. The increase was primarily driven by higher market returns on investments that fund certain employee benefit obligations and higher yields on captive insurance investments.

Income Tax Benefit. The decrease in the tax benefit was primarily due to a decrease in pretax losses. The ETRs for the three months ended June 30, 2026, and 2025, were 27.6% and 26.4%, respectively. The increase in the ETR was primarily due to favorable tax impacts related to higher investment returns.

Other's results were primarily driven by higher investment returns resulting from favorable market performance and lower Duke Energy Foundation contributions than the prior year, partially offset by higher interest expense.

Operating Expenses. The decrease was primarily due to lower Duke Energy Foundation contributions than the prior year.

Other Income and Expenses, net. The increase was primarily driven by favorable market returns on investments that fund certain employee benefit obligations, higher yields on captive insurance investments and higher money pool interest income, partially offset by lower equity earnings from the NMC investment.

Interest Expense. The increase was primarily due to higher outstanding debt balances.

Income Tax Benefit. The decrease in the tax benefit was primarily due to a decrease in pretax losses. The ETRs for the six months ended June 30, 2026, and 2025, were 26.8% and 26.2%, respectively.

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX

Three Months Ended June 30,

Six Months Ended June 30,

(in millions)

Variance

Variance

Income (Loss) From Discontinued Operations, net of tax

$

—

$

(1)

$

1

$

$

(1)

$

The variance was primarily due to the resolution of an outstanding liability related to the Commercial Renewables Disposal Groups.

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DUKE ENERGY CAROLINAS

DUKE ENERGY CAROLINAS

Results of Operations

Six Months Ended June 30,

(in millions)

Variance

Operating Revenues

$

$

$

Operating Expenses

Fuel used in electric generation and purchased power

Operation, maintenance and other

Depreciation and amortization

Property and other taxes

Impairment of assets and other charges

(1)

Total operating expenses

Gains (Losses) on Sales of Other Assets and Other, net

2

6

(4)

Operating Income

Other Income and Expenses, net

Interest Expense

Income Before Income Taxes

Income Tax Expense

Net Income

$

$

$

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.

Increase (Decrease) over prior year

Residential sales

%

Commercial sales

%

Industrial sales

%

Wholesale power sales

%

Joint dispatch sales

%

Total sales

%

Average number of customers

%

Operating Revenues. The variance was driven primarily by:

•a $223 million increase in fuel revenues due to higher fuel rates and volumes;

•a $76 million increase in weather-normal retail sales volumes;

•a $59 million increase due to higher pricing, including the nuclear PTC decrement rider, from the impacts of new rates implemented for the North Carolina MYRP and the 2025 South Carolina rate case;

•a $37 million increase in rider revenue primarily due to North Carolina storm securitization; and

•a $27 million increase in retail sales due to improved weather compared to the prior year.

Operating Expenses. The variance was driven primarily by:

•a $189 million increase in fuel used in electric generation and purchased power primarily due to higher purchased power costs, including JDA, and natural gas prices, partially offset by lower fuel cost recovery and the prior year retirement of renewable energy credits;

•a $143 million increase in depreciation and amortization primarily due to higher depreciable base, the prior year retirement of renewable energy credits, and the impact of new rates implemented for the North Carolina MYRP;

•a $94 million increase in operation, maintenance and other primarily due to increased costs related to a legal settlement and higher storm costs in the current year associated with Winter Storm Fern; and

•a $28 million increase in impairment of assets and other charges primarily due to regulatory settlements related to the 2025 North Carolina rate case.

Other Income and expenses, net. The increase was primarily due to higher AFUDC equity base compared to the prior year, partially offset by higher non-service pension costs.

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DUKE ENERGY CAROLINAS

Interest Expense. The increase was primarily due to higher outstanding debt balances, lower returns on deferred storm cost balances and higher accrued financing costs associated with deferred nuclear PTC liabilities.

Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of nuclear PTCs and a decrease in pretax income, partially offset by a decrease in the amortization of EDIT.

PROGRESS ENERGY

Results of Operations

Six Months Ended June 30,

(in millions)

Variance

Operating Revenues

$

$

$

Operating Expenses

Fuel used in electric generation and purchased power

Operation, maintenance and other

Depreciation and amortization

Property and other taxes

Impairment of assets and other charges

—

Total operating expenses

Gains (Losses) on Sales of Other Assets and Other, net

3

Operating Income

Other Income and Expenses, net

3

Interest Expense

Income Before Income Taxes

Income Tax Expense

Net Income

Less: Net Income Attributable to NCI

—

Net Income Attributable to Progress Energy

$

$

$

Operating Revenues. The variance was driven primarily by:

•a $252 million increase in fuel revenues primarily due to higher fuel rates and volumes;

•a $142 million increase due to higher pricing from the new rates implemented for the North Carolina MYRP and the 2025 South Carolina rate case at Duke Energy Progress and Year 2 of the 2024 Duke Energy Florida rate case;

•a $52 million increase in wholesale revenues, net of fuel, due to higher capacity volumes and rates at Duke Energy Progress;

•a $39 million increase in rider revenues primarily due to higher rates for the SPP at Duke Energy Florida;

•a $37 million increase in other revenues due to higher transmission revenues;

•a $35 million increase in weather-normal retail sales volumes; and

•a $22 million increase in retail sales due to improved weather compared to the prior year.

Partially offset by:

•a $261 million decrease in storm recovery revenues at Duke Energy Florida.

Operating Expenses. The variance was driven primarily by:

•a $174 million increase in fuel used in electric generation and purchased power primarily due to higher natural gas prices and purchased power costs at Duke Energy Progress and higher fuel costs driven by higher natural gas and coal prices and higher purchased power costs at Duke Energy Florida, partially offset by lower fuel cost recovery and the prior year retirement of renewable energy credits at Duke Energy Progress; and

•a $145 million increase in depreciation and amortization due to higher depreciable base at Duke Energy Progress and Duke Energy Florida and the impacts of new rates implemented for the North Carolina MYRP and the prior year retirement of renewable energy credits at Duke Energy Progress.

MD&A

PROGRESS ENERGY

Partially offset by:

•a $93 million decrease in operation, maintenance and other primarily due to lower storm amortization at Duke Energy Florida, partially offset by increased costs in the current year related to a legal settlement, higher storm costs associated with Winter Storm Fern, higher nuclear outage costs, and higher costs related to customer products and services programs at Duke Energy Progress; and

•a $16 million decrease in property and other taxes due to franchise tax refunds received in the current year at Duke Energy Progress.

Interest Expense. The increase was primarily due to higher outstanding debt balances.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of EDIT, partially offset by an increase in the amortization of nuclear PTCs.

Net Income Attributable to NCI. The increase was due to the first closing of a minority interest investment in Florida Progress by Brookfield Super-Core Infrastructure Partners.

DUKE ENERGY PROGRESS

Results of Operations

Six Months Ended June 30,

(in millions)

Variance

Operating Revenues

$

$

$

Operating Expenses

Fuel used in electric generation and purchased power

Operation, maintenance and other

Depreciation and amortization

Property and other taxes

Impairment of assets and other charges

—

Total operating expenses

Gains (Losses) on Sales of Other Assets and Other, net

1

—

1

Operating Income

Other Income and Expenses, net

Interest Expense

Income Before Income Taxes

Income Tax Expense

(2)

Net Income

$

$

$

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.

Increase (Decrease) over prior period

Residential sales

%

Commercial sales

%

Industrial sales

%

Wholesale power sales

%

Joint dispatch sales

%

Total sales

%

Average number of customers

%

Operating Revenues. The variance was driven primarily by:

•a $194 million increase in fuel revenues due to higher fuel rates and volumes;

•a $93 million increase due to higher pricing from the impacts of new rates implemented for the North Carolina MYRP and the 2025 South Carolina rate case;

•a $48 million increase in wholesale revenues, net of fuel, due to higher capacity volumes and rates;

•an $18 million increase in weather-normal retail sales volumes; and

•an $11 million increase in retail sales due to improved weather compared to the prior year.

MD&A

DUKE ENERGY PROGRESS

Operating Expenses. The variance was driven primarily by:

•a $134 million increase in operation, maintenance and other primarily due to increased costs related to a legal settlement and higher storm costs in the current year associated with Winter Storm Fern, higher nuclear outage costs, and higher costs related to customer products and services programs;

•a $111 million increase in fuel used in electric generation and purchased power primarily due to higher natural gas prices and purchased power costs, including JDA purchases, partially offset by lower fuel cost recovery and the prior year retirement of renewable energy credits;

•a $106 million increase in depreciation and amortization primarily due to higher depreciable base, the impacts of new rates implemented for the North Carolina MYRP and the prior year retirement of renewable energy credits; and

•a $22 million increase in impairment of assets and other charges primarily due to regulatory settlements related to the 2025 North Carolina rate case. See Note 4, "Regulatory Matters," to the Condensed Consolidated Financial Statements, for further information regarding the Duke Energy Progress 2025 North Carolina Rate Case.

Partially offset by:

•a $24 million decrease in property and other taxes due to franchise tax refunds received in the current year.

Other Income and expenses, net. The increase was primarily due to higher AFUDC equity rate and base compared to the prior year, partially offset by lower intercompany interest income.

Interest Expense. The increase was driven primarily by higher outstanding debt balances.

Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of nuclear PTCs, partially offset by a decrease in the amortization of EDIT and an increase in pretax income.

DUKE ENERGY FLORIDA

Results of Operations

Six Months Ended June 30,

(in millions)

Variance

Operating Revenues

$

$

$

Operating Expenses

Fuel used in electric generation and purchased power

Operation, maintenance and other

Depreciation and amortization

Property and other taxes

8

Total operating expenses

Gains (Losses) on Sales of Other Assets and Other, net

3

1

2

Operating Income

Other Income and Expenses, net

Interest Expense

Income Before Income Taxes

Income Tax Expense

Net Income

$

$

$

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Wholesale power sales include both billed and unbilled sales. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.

Increase (Decrease) over prior period

Residential sales

%

Commercial sales

%

Industrial sales

%

Wholesale power sales

%

Total sales

%

Average number of customers

%

Operating Revenues. The variance was driven primarily by:

•a $261 million decrease in storm recovery revenues.

MD&A

DUKE ENERGY FLORIDA

Partially offset by:

•a $58 million increase in fuel revenues primarily due to higher rates;

•a $49 million increase due to higher pricing from Year 2 of the 2024 Florida rate case;

•a $39 million increase in rider revenues primarily due to higher rates for the SPP;

•a $34 million increase in other revenues primarily due to higher transmission revenues from higher rates;

•a $16 million increase in weather-normal retail sales volumes; and

•an $11 million increase in retail sales due to improved weather compared to the prior year.

Operating Expenses. The variance was driven primarily by:

•a $226 million decrease in operation, maintenance and other primarily due to lower storm amortization.

Partially offset by:

•a $63 million increase in fuel used in electric generation and purchased power primarily due to higher fuel and purchased power costs driven by weather, partially offset by lower fuel cost recovery; and

•a $38 million increase in depreciation and amortization primarily due to higher depreciable base.

Other Income and Expenses, net. The decrease was primarily due to higher non-service pension costs.

Interest Expense. The increase was primarily due to higher outstanding debt balances.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of EDIT.

DUKE ENERGY OHIO

Results of Operations

Six Months Ended June 30,

(in millions)

Variance

Operating Revenues

Regulated electric

$

$

$

Regulated natural gas

Nonregulated electric and other

—

—

—

Total operating revenues

Operating Expenses

Fuel used in electric generation and purchased power

8

Cost of natural gas

Operation, maintenance and other

Depreciation and amortization

2

Property and other taxes

8

Total operating expenses

Operating Income

Other Income and Expenses, net

(1)

Interest Expense

7

Income Before Income Taxes

Income Tax Expense

Net Income

$

$

$

MD&A

DUKE ENERGY OHIO

The following table shows the percent changes in GWh sales of electricity, dekatherms of natural gas delivered and average number of electric and natural gas customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.

Electric

Natural Gas

Increase (Decrease) over prior year

Residential sales

%

%

Commercial sales

%

%

Industrial sales

%

%

Wholesale electric power sales

%

n/a

Other natural gas sales

n/a

%

Total sales

%

%

Average number of customers

%

%

Operating Revenues. The variance was driven primarily by:

•a $44 million increase in fuel-related revenues primarily due to higher natural gas costs passed through to customers, partially offset by lower natural gas retail sales volumes;

•a $35 million increase in retail revenue riders primarily due to the Distribution Capital Investment Rider, Base Transmission Rider, Ohio CEP Rider and Pipeline Modernization Mechanism Rider;

•a $33 million increase primarily due to higher pricing from the 2024 Duke Energy Kentucky electric rate case and the 2025 Duke Energy Kentucky natural gas rate case; and

•a $17 million increase in Bulk Power Marketing sales.

Partially offset by:

•a $12 million decrease in Ohio Valley Electric Corporation (OVEC) rider recoveries.

Operating Expenses. The variance was driven primarily by:

•a $35 million increase in operation, maintenance and other primarily due to higher costs associated with environmental remediation and compliance activities and higher bad debt expense; and

•a $26 million increase in fuel expense primarily due to higher retail prices for natural gas and purchased power.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income.

DUKE ENERGY INDIANA

Results of Operations

Six Months Ended June 30,

(in millions)

Variance

Operating Revenues

$

$

$

Operating Expenses

Fuel used in electric generation and purchased power

Operation, maintenance and other

(8)

Depreciation and amortization

(7)

Property and other taxes

3

Total operating expenses

Operating Income

Other Income and Expenses, net

(8)

Interest Expense

Income Before Income Taxes

Income Tax Expense

1

Net Income

$

$

$

MD&A

DUKE ENERGY INDIANA

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.

Increase (Decrease) over prior year

Residential sales

%

Commercial sales

%

Industrial sales

%

Wholesale power sales

%

Total sales

%

Average number of customers

%

Operating Revenues. The variance was driven primarily by:

•a $98 million increase primarily due to higher pricing from the 2024 Indiana rate case, net of certain rider revenues moving to base; and

•an $87 million increase in fuel revenues primarily due to higher retail fuel rates.

Partially offset by:

•a $28 million decrease in retail sales due to unfavorable weather compared to prior year; and

•a $24 million decrease in rider revenues.

Operating Expenses. The variance was driven primarily by:

•a $141 million increase in fuel used in electric generation and purchased power primarily due to higher natural gas and coal costs, as well as higher amortization of deferred fuel and Midcontinent Independent System Operator, Inc. costs.

Interest Expense. The increase was primarily due to higher outstanding debt balances.

PIEDMONT

Results of Operations

Six Months Ended June 30,

(in millions)

Variance

Operating Revenues

$

$

$

Operating Expenses

Cost of natural gas

Operation, maintenance and other

Depreciation and amortization

2

Property and other taxes

(7)

Total operating expenses

Gains (Losses) on Sales of Other Assets and Other, net

—

Operating Income

Other Income and Expenses, net

1

Interest Expense

(6)

Income Before Income Taxes

Income Tax Expense

Net Income

$

$

$

MD&A

PIEDMONT

The following table shows the percent changes in dekatherms delivered and average number of customers. The percentages for all throughput deliveries represent billed and unbilled sales. Amounts are not weather-normalized.

Increase (Decrease) over prior year

Residential deliveries

%

Commercial deliveries

%

Industrial deliveries

%

Power generation deliveries

%

For resale

%

Total throughput deliveries

%

Secondary market volumes

%

Average number of customers

%

Operating Revenues. The variance was driven primarily by:

•a $105 million increase in cost of natural gas revenues primarily due to higher commodity prices;

•an $8 million increase due to the North Carolina IMR; and

•an $8 million increase due to the South Carolina Rate Stabilization Act.

Partially offset by:

•a $24 million decrease due to lower revenues as a result of the sale of Piedmont's Tennessee business.

Operating Expenses. The variance was driven primarily by:

•a $105 million increase in cost of natural gas due to higher commodity prices.

Partially offset by:

•a $16 million decrease in operations, maintenance and other primarily due to lower expenses as a result of the sale of Piedmont's Tennessee business and lower shared services costs.

Gains (Losses) on Sales of Other Assets and Other, net. The increase was due to the gain on sale of Piedmont's Tennessee business.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and higher state tax expense associated with the sale of Piedmont's Tennessee business.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

Duke Energy relies primarily upon cash flows from operations, debt and equity issuances and its existing cash and cash equivalents to fund its liquidity and capital requirements. Duke Energy’s capital requirements arise primarily from capital and investment expenditures, repaying long-term debt and paying dividends to shareholders. Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida are also monetizing tax credits in the transferability markets established by the IRA and are working with utility commissions on the appropriate regulatory process to pass the net realizable value back to customers over time. In April 2026, we executed a multi-year agreement to sell up to $3.1 billion of net tax credits with expected proceeds to be received through 2029.

See Note 16 to the Condensed Consolidated Financial Statements, “Income Taxes,” for further information. Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2025, included a summary and detailed discussion of projected primary sources and uses of cash for 2026 to 2028.

Duke Energy has executed several equity forward sales agreements as part of the ATM program. Settlement of the forward sales agreements is expected to occur by December 31, 2027. See Note 14 to the Condensed Consolidated Financial Statements, “Stockholders’ Equity” for further details.

In March 2026, Duke Energy extended the termination date of its existing $10 billion Master Credit Facility to March 2031. As of June 30, 2026, Duke Energy had $673 million of cash on hand and $8.0 billion available under its Master Credit Facility. Duke Energy expects to have sufficient liquidity in the form of cash on hand, cash from operations and available credit capacity to support its funding needs.

In July 2025, Piedmont entered into a purchase agreement with Spire Inc., to sell Piedmont’s Tennessee business. On March 31, 2026, Piedmont closed on the sale and received proceeds of approximately $2.5 billion. In August 2025, Duke Energy, Progress Energy and Florida Progress entered into an investment agreement for Florida Progress to receive $6 billion in exchange for an eventual anticipated 19.7% indirect investment in Duke Energy Florida following a series of closings through June 30, 2028. On March 3, 2026, Duke Energy, Progress Energy and Florida Progress consummated the first closing that resulted in Florida Progress issuing 9.19% of its membership interests in exchange for approximately $2.8 billion in cash proceeds. See Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for further details.

MD&A

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Information

The following table summarizes Duke Energy’s cash flows.

Six Months Ended

(in millions)

Cash flows provided by (used in):

Operating activities

$

$

Investing activities

Financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

$

$

OPERATING CASH FLOWS

The following table summarizes key components of Duke Energy’s operating cash flows.

Six Months Ended

(in millions)

Variance

Net income

$

$

$

Non-cash adjustments to net income

Payments for asset retirement obligations

(8)

Working capital

Other assets and Other liabilities

(7)

Net cash provided by operating activities

$

$

$

The variance is primarily driven by:

•a $981 million decrease in cash inflow due to changes in other assets and liabilities, primarily due to higher deferred fuel and purchased power costs as well as storm restoration costs due to severe winter weather.

Partially offset by:

•a $334 million increase in net income, after adjustment for non-cash items, primarily due to the recovery of infrastructure investments to reliably serve customers in our growing jurisdictions, partially offset by interest expense and operation and maintenance expense, including storm costs.

INVESTING CASH FLOWS

The following table summarizes key components of Duke Energy’s investing cash flows.

Six Months Ended

(in millions)

Variance

Capital, investment and acquisition expenditures

$

$

$

Proceeds from the sale of Piedmont's Tennessee business

—

Proceeds from the sale of Commercial Renewables Disposal Groups

—

Other investing items

Net cash used in investing activities

$

$

$

The variance is primarily driven by proceeds received from the sale of Piedmont's Tennessee business, partially offset by higher capital expenditures within the EU&I segment. The variance also reflects the absence of proceeds received in the prior year from the sale of the Commercial Renewables Disposal Groups.

MD&A

LIQUIDITY AND CAPITAL RESOURCES

FINANCING CASH FLOWS

The following table summarizes key components of Duke Energy’s financing cash flows.

Six Months Ended

(in millions)

Variance

Issuance of long-term debt, net

$

$

$

Issuance of common stock

—

Notes payable, commercial paper and other short-term borrowings

Dividends paid

Contributions from NCI

—

Other financing items

(2)

Net cash provided by financing activities

$

$

$

The variance is primarily due to:

•a $2.8 billion increase in proceeds received from the initial closing of Brookfield Super-Core Infrastructure Partners' minority interest investment in Florida Progress.

Partially offset by:

•a $1.4 billion decrease in proceeds from net issuances of long-term debt, primarily due to the timing of issuances and redemptions; and

•a $175 million decrease in net borrowings from notes payable and commercial paper.

OTHER MATTERS

Environmental Regulations

The Duke Energy Registrants are subject to federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal, coal ash and other environmental matters. These regulations can be changed from time to time and result in new obligations of the Duke Energy Registrants. Refer to Note 4, "Regulatory Matters," in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2025, for more information regarding potential plant retirements and Note 4, "Regulatory Matters," to the Condensed Consolidated Financial Statements, for further information regarding regulatory filings related to the Duke Energy Registrants.

GHG Standards and Guidelines

In April 2024, the EPA issued final rules under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants, referred to as electric generating units. Compliance with EPA Rule 111 as issued would have a material impact on the timing, nature and magnitude of future generation investments in our service territories. Duke Energy is participating in legal challenges to EPA Rule 111 as a member of Electric Generators for a Sensible Transition, a coalition of similarly affected utilities, and as a member of a utility trade group. The litigation is currently pending in the U.S. Court of Appeals for the District of Columbia Circuit (the Court).

On February 5, 2025, the EPA requested the Court to withhold issuing an opinion and place the case in a 60-day abeyance to allow time for new EPA leadership to review the issues and EPA Rule 111 to determine how they wish to proceed. On February 19, 2025, the Court granted EPA’s request. On April 21, 2025, the EPA filed a motion with the Court requesting a continuing abeyance while it conducts a new notice-and-comment rulemaking to reconsider the challenged EPA Rule 111. On April 25, 2025, the Court granted the EPA’s motion and ordered that the litigation continue to remain in abeyance pending further order of the Court.

On June 17, 2025, the EPA published a proposed rule to repeal EPA Rule 111 based on a finding that fossil fuel-fired power plants “do not contribute significantly to dangerous air pollution” under the meaning of section 111 of the Clean Air Act. The EPA also published an alternative proposal to repeal a narrower set of requirements leaving in place only GHG emission standards for new and reconstructed stationary combustion turbine electric generating units. Comments on the proposed rule were due by August 7, 2025. The Duke Energy Registrants will continue to monitor rule-making developments and actions of the court and will evaluate the impacts of any final rule and other EPA actions, once available.

Coal Combustion Residuals

In April 2024, the EPA issued the 2024 CCR Rule, which significantly expanded the scope of the 2015 CCR Rule by establishing regulatory requirements for inactive surface impoundments at retired generating facilities (Legacy CCR Surface Impoundments). The 2024 CCR Rule also imposed a subset of the 2015 CCR Rule's requirements, including groundwater monitoring, corrective action (where necessary), and in certain cases, closure, and post-closure care requirements, on previously unregulated coal ash surfaces at regulated facilities (CCR Management Units). Duke Energy, as part of a group of similarly affected electric utilities, filed a petition to challenge the 2024 CCR Rule in the U.S. Court of Appeals for the District of Columbia Circuit (the Court) on August 6, 2024.

On February 13, 2025, the EPA requested the Court to withhold issuing an opinion and place the case in abeyance to allow time for new EPA leadership to review the issues and the 2024 CCR Rule to determine how they wish to proceed. On that same day, the Court granted EPA’s motion. On December 15, 2025, the EPA filed a motion with the Court requesting a continuing abeyance while it reconsiders certain aspects of the 2024 CCR Rule for both Legacy CCR Surface Impoundments and CCR Management Units. On December 16, 2025, the Court granted the EPA’s motion and ordered that the litigation continue to remain in abeyance pending further order of the Court.

MD&A

OTHER MATTERS

On April 13, 2026, the EPA published in the Federal Register a proposed rule titled “Hazardous and Solid Waste Management System: Disposal of Coal Combustion Residuals from Electric Utilities; Legacy/CCRMU Amendments” under which the EPA proposes numerous amendments to the 2015 CCR Rule, as amended by the 2024 CCR Rule. Among other changes, the EPA is proposing to rescind all CCR Management Unit requirements finalized in the 2024 CCR Rule. In the event the EPA determines not to rescind all such requirements, the EPA is also seeking comments on several potential alternatives that would revise the existing CCR Management Unit regulations, including (i) deferring all CCR Management Unit requirements (other than the requirement to complete facility evaluations) to determinations made by a regulatory authority under a state or federal CCR permit program and (ii) expanding the CCR permit program deferral criteria for certain CCR Management Unit closures to a state or federal permit authority.

With respect to Legacy CCR Surface Impoundments, the EPA is proposing (i) to establish an additional pathway for owners and operators of such units to certify closure by removal of the unit under the oversight of a regulatory authority prior to November 8, 2024, and (ii) to expand the CCR permit program deferral criteria for Legacy CCR Surface Impoundments that completed closure under state or federal regulatory authority prior to November 8, 2024, until the CCR permit authority can consider, on a site-specific basis, the need for additional closure measures, if any, to be taken. The Duke Energy Registrants will continue to monitor rule-making developments and actions of the court and will evaluate the impacts of any final rule and other EPA actions, once available. A final rule is anticipated in the fourth quarter of 2026.

In addition to the requirements of the federal CCR rules, CCR landfills and surface impoundments will continue to be regulated by the states. Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions and via wholesale contracts, which permit recovery of reasonable and prudently incurred costs associated with Duke Energy’s regulated operations.

State Legislation

Indiana House Enrolled Act 1002

Indiana House Enrolled Act 1002 was signed into law on February 26, 2026. It reflects legislative priorities focused on electric utility affordability, low-income customer protections and assistance, and longer-term ratemaking concepts, including three-year rate plans and performance-based affordability and reliability metrics. Under the law, Duke Energy Indiana is required to file its first MYRP between November 15 and December 15, 2026.

Ohio Natural Gas Senate Bill 103

Ohio Senate Bill 103 (SB103) was signed into law and became effective on March 20, 2026. SB103 allows natural gas utilities to file MYRPs with forward-looking test periods.

Carolinas Resource Plan

On October 1, 2025, Duke Energy Carolinas and Duke Energy Progress filed their systemwide 2025 Carolinas Resource Plan (the 2025 Plan) with the NCUC that builds upon the approved dual-state 2023 Carolinas Resource Plan. The 2025 Plan seeks to maximize the value of existing resources, enhance grid flexibility and add new supply-side resources to reliably meet growing energy demands in the most reasonable and cost-effective manner in a period of unprecedented load growth. The evidentiary hearing took place in June 2026 and an order from the NCUC is expected to be issued by December 31, 2026. Information related to the updated systemwide plan was filed with the PSCSC on November 25, 2025, and the PSCSC issued an order accepting the resource plan on May 15, 2026.